How Using an Employer of Record in Vietnam Can Improve Your Business

Learn about an employer of record is and how you can use it to improve or expand your business.


Recruiting new employees can be challenging, even more so when you’re trying to recruit in a foreign market.

The recruitment and management of new employees can always be a challenge, especially when you are new in a foreign market. How to make the process easier so that you could focus on delivering results? In this article, we have brought out some of the key advantages of using an employer of record in Vietnam.

What is an employer of record

An employer of record is a service provider who can hire and manage employees on your behalf. The scope of services provided by an employer of record includes recruiting and hiring, management of payroll, and filing taxes for employees.

Watch this video to learn more about the employer of record services:

Main benefits of using an employer of record

Enter new markets faster

If you plan on hiring staff through your own company, you must register your business in Vietnam first. Depending on your business classification and planned activities, this process can take up to a month. This applies to hiring local and foreign employees.

To hire foreign employees, you will need to apply for the use of foreign labor. You can send this application along with your company registration, but you can only hire foreigners 15 days after submission.

Because an employer of service can hire staff on your behalf, you don’t have to worry about your company registration and application for use of foreign labor. Your employer of service will recruit employees for you so you can start your business activities immediately. The employer of record can also hire candidates that you have already selected. It’s a simple and convenient way to build your remote staff in Vietnam.

You have the option to transfer employees to your company after incorporation, or you can continue to use the services of your employer of record.

Learn more about building remote software teams using employer of record service.

Test the market before setting up a company

There are no minimum capital requirements in Vietnam, but setting up a company can still be costly. Testing the Vietnamese market before investing and establishing your business would be a smart move.

Using an employer of record will allow you to hire employees who can test the market for you. Full-time employees hired through an employer of record can conduct market research, find potential distributors, or sell your products. 

Employers of record allow you to create relationships with clientele, customers, and partners before you set up your own legal entity.

No need to understand local compliance requirements

There is a tendency for emerging markets like Vietnam to change policies and regulations often. As such, it can be difficult for foreign employers to keep up with changes to employment policies.

The same policies and regulations apply to all employers, both local and foreign. However, foreigners often make the mistake of thinking that they are exempt from local policies. Employers of record have a lot of knowledge and experience in managing staff so you won’t have to worry about policy changes and compliance.

Experts will find the best candidates for you

Foreign investors likely won’t know much about the local workforce which will make it difficult to find the right candidates. An employer of record is already familiar with the local market and will know how to find and shortlist the perfect candidates for you. Your employer of record will assist you through every step of the hiring process and beyond.

Working space availability

By using an employer of record like Emerhub, you won’t need to think about renting an office space for your remote staff. We will provide your employees with workspaces and any tools they may need so they can effectively perform their duties.

Why use an employer of record in Vietnam?

Vietnam is one of the fastest-growing economies in the world. Investing in the country is a good move if you want to do business or expand your operations abroad. With an employer of record, you can do this without establishing a legal presence in the country.

The employment pool in Vietnam is also attractive for several reasons including the ones we discuss below.

Young and educated workforce

Vietnam is home to a young and educated workforce. Worldometer reports that the median age in this country is 32.5 years old and the World Bank states that 70% of the population is under 35 years old.

The Vietnamese government greatly values education and allots about 20% of its finances to education. Additionally, in 2019, the EF English Proficiency Index (EF EPI) ranked Vietnam 10th out of 25 Asian countries in terms of skills in the English language. The EF EPI also notes moderate English skills in Hanoi and Ho Chi Minh.

Low labor costs

The minimum wage in Vietnam remains relatively low despite their stable GDP growth rate which according to the World Bank was at 7.08% in 2018.

Minimum wage rates in select Asian countries*:

CountryMonthly minimum wage in 2019/2020**
ChinaUSD 341
IndonesiaUSD 215
MalaysiaUSD 253
VietnamUSD 177
*Figures reported in Trading Economics
**Figures converted to USD using rates at the time of writing

Let’s talk about how you can expand your business to Vietnam. Contact us by filling out the form below or send an email to [email protected]

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